An array of insurance products are available in the market place. One class of products may be described as “fully underwritten” products. That is, the parameters and costs of coverage are determined by an underwriter (usually having a relatively high degree of expertise and experience) after evaluating information from various sources and of varying types. Fully-underwritten products are typically used when face values of coverages are relatively large, or when an insurer is attempting to price products precisely by collecting and evaluating more information relating to the underlying risks.
Other types of insurance products are so called “simplified-issue” products. Such products may be priced and issued based upon relatively little information, and with relatively little involvement on the part of a professional underwriter. Such products may be limited to smaller face values, and may be limited in duration, as well. The pricing of such products is less precise and, when compared to a comparable, fully-underwritten product, usually relatively higher. This is a result of the additional uncertainty faced by the insurer in the absence of additional information relating to the subject risk, and a reflection of the often lower quality of the information evaluated. Such products may also be referred to as “instant-issue” or “immediate-issue” products.
FIG. 1 is a graph which illustrates a mortality comparison for a particular class of insured individuals covered by products that are fully underwritten and non-fully underwritten. Line 10 indicates the expected mortality of a particular class of insureds covered by a fully-underwritten product. That is, the application process involves collecting information (such as examination by a medical professional or paraprofessional, urine specimen, blood profile, etc.) over and above that typically submitted on an insurance application by each of the insured individuals. The information is then evaluated by an underwriter, or according to criteria developed by an underwriter, prior to specifying and pricing an applicable insurance product.
With continued reference to FIG. 1, line 12 illustrates the expected mortality of the same class of insureds when no medical information is available. Due to the higher mortality experienced with this group, the pricing and profitability of comparable insurance policies covering individuals in these two groups differ substantially.
Other insurance products may be characterized by similar comparisons. For instance, auto insurance coverage for certain individuals and/or with certain features and coverage limits may be offered with, or without, the benefit of information from sources other than the applicant. Property and casualty insurance products, and other types of insurance products may be similarly designed and priced. Advantages of products which are fully underwritten (or at least relatively so) are more precision and less uncertainty with regard to occurrence of the event insured against, greater profitability to the insurer and the ability to more competitively price products. Disadvantages include the time required and expense associated with obtaining the information required for the full underwriting process.
Advantages of the simplified issue products include the ease and relatively low cost associated with collecting the limited amount of information considered by the insurer. As discussed above, disadvantages include a higher probability of occurrence of the event insured against, and associated pricing and profitability ramifications.
There exists a need for methods and systems for evaluating risks, and for providing insurance products to cover risks, which combine the ease and convenience of simplified-issue products with the precision and advantageous features of fully-underwritten products.
The remainder of this disclosure describes such systems and methods. For purposes of illustration only, a method and system are described in the context of life insurance. However, the invention in its broader forms is not limited to this particular application. While the subject system and method may provide particular advantages in the field of life and/or health insurance, similar techniques may also be applied in other contexts (e.g., property and casualty insurance, automobile insurance, etc.).
One embodiment of the present invention comprises an automated method of evaluating an insurable risk and providing an immediate binding insurance offer to cover that risk. The automated method comprises the steps of collecting self-reported information relating to the risk from an applicant, collecting objective information relating to the risk, providing the self-reported information and the objective information to an automated underwriting system, evaluating and rating the risk using the automated underwriting system, and providing an insurance offer relating to a specific insurance product for review and acceptance by the applicant. The method may also include the step of obtaining, via electronic means, consent from the applicant to provide the self-reported and objective information to the automated underwriting system. An additional step of obtaining an electronic authorization from the applicant for the immediate release of objective information from at least one of a health care provider, pharmacy or pharmacy benefit manager, a consumer reporting agency and the Medical Information Bureau, and for evaluation of such objective information by the automated underwriting system may also be provided.
Certain embodiments of the invention further comprise the step of producing a preliminary rate quote for the applicant based upon the self-reported information. Information gathering apparatus may be provided for the applicant's use in reporting the self-reported information. That apparatus may include at least one of a keyboard, a display, a touch screen display, and a pointing device. The information gathering apparatus may further include an automated application to elicit the self-reported information from the applicant. The automated application has, in certain embodiments, multiple screens and multiple levels of screens for eliciting the self-reported information. At least one of the screens presented to the applicant in at least one of the multiple levels is selected in response to information reported by the applicant in a preceding level.
The self-reported information may include at least one of age, address, citizenship, medical history, family medical history, nicotine usage, alcohol usage, drug usage, motor vehicle information, aviation information, and hazardous activities information. The objective information may include at least one of height and weight, blood pressure, pulse rate, blood cholesterol, blood glucose, evidence of drug usage, HIV exposure, tumor markers, evidence of tobacco usage, lung capacity, evidence of kidney disease, information from the Medical Information Bureau, information relating to prescribed drugs, consumer credit information, and motor vehicle information.
Certain embodiments of the subject method include the step of collecting information relating to a beneficiary of the insurance product. These and other embodiments may further include the step of producing an immediate, final rate quote for the applicant based upon the self-reported and objective information. An insurance application relating to the insurance product may also be provided. Payment information may be collected from the applicant for the insurance product if the final rate quote is accepted. Provision may be made for obtaining an electronic signature from the applicant, and for producing a printed copy of the application and providing the copy to the applicant.
Another embodiment of the present invention comprises a system for evaluating an insurance risk and providing an immediate binding insurance offer to cover that risk. The system comprises means for collecting self-reported information relating to the risk from an applicant, means for collecting objective information relating to the risk, an automated underwriting program, and means for providing the self-reported information and the objective information to the automated underwriting program. The automated underwriting program evaluates and rates the insurable risk and produces a binding insurance rate quote relating to an insurance product to cover the risk.
In this and other embodiments, the means for collecting self-reported information may include an automated application, an information gathering apparatus, such as a keyboard, a display, a touch screen display, a pointing device, or other devices used for entering information into a computing device. The automated application may include multiple screens and multiple levels. At least one of the screens presented to the applicant in at least one of the levels is selected in response to information reported by the applicant in a preceding level.
The self-reported information includes the same type of information referred to above in connection with the automated method. The means for collecting information comprises various pieces of apparatus for collecting the same type of objective information referred to above. Some apparatus may be manually operated, and may be used by a technician. The information produced is then manually inputted into the system by the technician. Alternatively, apparatus which automatically gathers the objective information, with or without active participation by the applicant, and which automatically communicates the information to the automated underwriting program, may also be used.
In these and other embodiments of the system, the means for collecting objective information may further comprise means for obtaining information from the Medical Information Bureau, and means for obtaining information relating to prescribed drugs, consumer credit information and motor vehicle information. The subject means may include databases maintained for these purposes, and digital communications networks for transmitting the information.
In certain embodiments of the system, the automated underwriting program produces a final rate quote for the applicant based upon the self-reported and objective information. An insurance application may be produced and displayed to the applicant, and a copy may be produced for the applicant's benefit.
One embodiment of the present invention comprises a system for evaluating an applicant for life insurance and for providing an immediate binding insurance offer for review and acceptance by the applicant. The subject system comprises information collecting apparatus for use by an applicant entering self-reported information, one or more stations for collecting objective information from the applicant, a processor, apparatus for communicating and inputting the self-reported and objective information to the processor, a display, and one or more input devices. The information collecting apparatus comprises at least a display, an automated life insurance application which can be viewed by the applicant using the display, and an input device for use by the applicant in entering the self-reported information. The processor hosts a life insurance underwriting program. The self-reported information and the objective information is communicated to the processor by one or more data communications links for use by the life insurance underwriting program. In certain embodiments, a preliminary report based on the self-reported information is displayed to the applicant, and a final quote based upon both the self-reported information and the objective information is subsequently displayed. The input device is provided for use by the applicant in acknowledging one or both of the quotes.
In some embodiments, the life insurance underwriting program provides an insurance application for review and acceptance by the applicant. Also in certain embodiments, the one or more stations for collecting objective information includes at least one of the following: apparatus for measuring height and weight; apparatus for measuring blood pressure; apparatus for measuring pulse rate; apparatus for measuring blood cholesterol; apparatus for measuring blood glucose; apparatus for detecting evidence of drug usage; apparatus for detecting HIV exposure; apparatus for detecting tumor markers; apparatus for detecting evidence of tobacco usage; apparatus for measuring lung capacity; and apparatus for detecting evidence of kidney disease. Apparatus may also be provided for obtaining information from the Medical Information Bureau, obtaining information relating to prescribed drugs, obtaining consumer credit information and/or obtaining motor vehicle information.
One embodiment of the invention comprises a computer based system for capturing data at a point of sale relating to mortality or morbidity risk assessment, and a related insurance product. The computer based system comprises a processor, a memory, an input device, a plurality of stations for collecting medical and/or physical data relating to the applicant, and at least one data communications link connecting the stations to the processor. The processor is programmed to receive the medical and/or physical data via the data communications link, and to store the received data in the memory. The input device is connected to the processor for use in entering data relating to an applicant, including the applicant's age, for storage in the memory. The data communications link may be a wired or wireless link.
Certain embodiments comprise a risk assessment program for assessing a mortality or morbidity insurance risk using the stored data in the memory. A data communication link may be provided for use by the processor in transmitting the data stored in the memory to the mortality or morbidity risk assessment system, and for receiving a risk assessment from the system. The system may further comprise a program for generating a life insurance policy using the information stored in the memory, means for confirming an identity of the applicant, and means for receiving an electronic signature of the applicant.
One or more of the plurality of stations for collecting medical and/or physical data relating to the applicant may include apparatus for analyzing and/or measuring various factors. For example, one or more of the stations may include apparatus for analyzing saliva, blood, urine and hair samples. One or more of the stations may further comprise apparatus for measuring blood cholesterol, blood glucose, blood pressure, heart rate and lung capacity. Further, one or more of the stations may include apparatus for detecting drug or tobacco usage, tumor markers, exposure to HIV and/or kidney disease. One or more of the stations may include apparatus for measuring weight and height of the applicant.
Additional embodiments, features and advantages will become apparent to those skilled in the art upon consideration of the following detailed description of the illustrated embodiments exemplifying the best mode of carrying out the invention as presently perceived.
Corresponding reference characters indicate corresponding parts throughout the several views. The discussion which follows is intended to illustrate embodiments of the subject method and system, and is not intended to and should not be construed as limiting the scope of the subject invention. The scope of the invention is defined by the claims which follow this description.